- The Securities and Exchange Commission is stalling its consideration process for a resolution on spot Ether ETFs.
- Both BlackRock and Fidelity’s Ethereum ETF proposals have been advanced for public commentary.
- Ethereum ETF experts have asserted that approval is unlikely until the next few months.
Since the approval and launch of Bitcoin ETFs, expectations have heightened for the Securities and Exchange Commission (SEC) to follow suit with the approval of exchange-traded funds for the second-largest crypto asset, Ethereum. However, the commission, renowned for its lukewarm approach to the asset class, has adopted a waiting game, pushing back on deadlines for multiple issuers in the race for approval.
Adding to the intrigue, the commission has once again delayed its ongoing review of Ethereum ETFs.
Ethereum ETF Decision Stalled
On Monday, March 4, the SEC issued separate filings for BlackRock and Fidelity’s Ether ETF applications, inviting public commentary on each proposal. This follows the commission’s extension of the deadlines of both applications, which added additional days to its review of their respective requests to launch the iShares Ethereum Trust and the Fidelity Ethereum Fund.
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Given its scrutiny of Ethereum’s legal status and suitability for an ETF, the commission has demanded public feedback on the susceptibility of the Ethereum Proof-of-Stake mechanism to fraud and manipulation, requesting a review of the transparency and liquidity of the asset.
The SEC’s provision for accepted commentary and rebuttals until March 25 and April 8, respectively, exceeds the previously set deadlines for feedback on BlackRock and Fidelity’s proposals, suggesting that additional extensions may be issued. However, this aligns with expert predictions that extensions at this phase are typical and expected to continue over the coming months.
ETF analyst James Seyffart emphasized that May 23, 2024, is a more likely timeline for a verdict, by which the SEC will likely approve or disapprove the proposed investment vehicle.
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Despite the commission’s continuous rescheduling, the broader optimism for approval remains high, fueled by the outstanding record of Bitcoin ETFs since launch.
Bitcoin ETFs Explosive Performance
The launch of Bitcoin ETFs upon approval took the global financial world by storm, smashing long-standing records and outperforming traditional investment commodities since their first day of trade.
Leading the charge is BlackRock, which holds 162,629.9 Bitcoins valued at approximately $10.3 billion, surpassing established investment vehicles like Silver ETFs in terms of assets under management (AuM).
Fidelity’s WiseOrigin Bitcoin ETF and Ark Invest 21 Shares’ ARKB follow closely, holding 105,196.9 Bitcoins ($6.4 billion) and 34,223.4 Bitcoins ($2.1 billion), respectively, bringing the total assets managed by all nine issuers to over a cumulative $25 billion.
Amid the positive trend, however, Grayscale’s GBTC has experienced a downturn, recording over $2 billion in outflows since launch.
On the Flipside
- Ethereum is enjoying an impressive uptick in price, soaring over 60.8% in the last 30 days.
- Unlike Bitcoin, the institutional support for Ethereum is not as broad, which may pose a challenge to the success of the investment vehicle if approved.
- Bitcoin ETF issuers Ark Invest and VanEck are also seeking Ethereum ETF approval.
Why This Matters
While the approval of Bitcoin ETFs signaled easing regulatory standards for the industry, the SEC asserted that it does not guarantee a broader embrace of the asset class. The commission’s invitation for public commentary on BlackRock and Fidelity’s proposals underscores its efforts to thoroughly assess the applications before reaching a verdict.
Read more about SEC Commissioner Hester Peirce’s remarks on the consideration process of Ethereum ETFs:
Ethereum ETF: “Let Americans Decide” SEC Commissioner Urges
Stablecoins join Bitcoin-led market rally gainers, led by Tether’s USDT. Find out more:
USDT Hits $100B Market Cap as Stablecoins Match Market Rally
